Attached files
file | filename |
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8-K - FORM 8-K - LTV CORP | l38127e8vk.htm |
Exhibit 99.1
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS
FOR THE LTV INTEGRATED STEEL BUSINESS FOR THE PERIOD ENDED
OCTOBER 31, 2009
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS
FOR THE LTV INTEGRATED STEEL BUSINESS FOR THE PERIOD ENDED
OCTOBER 31, 2009
: | ||||
In re:
|
: | Chapter 11 | ||
: | ||||
LTV STEEL COMPANY, INC.,
|
: | Jointly Administered | ||
A New Jersey corporation, et al.,
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: | Case No. 00-43866 | ||
: | ||||
Debtors.
|
: | Chief Judge Randolph Baxter |
As President and Treasurer of The LTV Corporation (LTV), a corporation organized under the
laws of the State of Delaware and one of the debtors and debtors in possession in the
above-captioned Chapter 11 cases (collectively, the Debtors), I hereby affirm that:
1. I have reviewed the following Integrated Steel Business financial reports for October 2009
attached hereto (collectively, the Statements) Cash Receipts and Disbursements and Debtors
Cash Account Balances.
2. The Statements are based on the Debtors books and records maintained in the ordinary
course of business. The statements have been prepared in accordance with normal and customary
accounting practices and fairly and accurately reflect the relevant information for the applicable
period.
3. The insurance described in Section 4 of the Operating Instructions and Reporting
Requirements for Chapter 11 Cases (the Operating Instructions) issued by the U.S. Trustee remains
in force.
4. All postpetition taxes, as described in Sections 1 and 14 of the Operating Instructions,
and due prior to the commencement of the LTV Steel Asset Protection Plan, are current and have been
paid in the ordinary course of business.
5. No professional fees have been paid without specific Court authorization.
The Statements were prepared by LTV under my direction and supervision. LTV verifies that, to
the best of its knowledge, the information set forth in the Statements is true and correct.
Dated: November 18, 2009 | /s/ John T. Delmore | |||
John T. Delmore | ||||
President and Treasurer The LTV Corporation |
||||
The LTV Corporation
Integrated Steel Business
Cash Receipts and Disbursements October 2009
(Unaudited)
($ in Thousands)
Integrated Steel Business
Cash Receipts and Disbursements October 2009
(Unaudited)
($ in Thousands)
Receipts |
$ | 11 | ||
Disbursements: |
||||
Labor |
20 | |||
Non-labor administrative expenditures |
25 | |||
Insurance |
29 | |||
Other |
| |||
Chapter 11 Professionals |
151 | |||
Total |
225 | |||
Receipts less Disbursements |
(214 | ) | ||
Beginning cash balance |
10,492 | |||
Ending cash balance |
$ | 10,278 | ||
See accompanying notes to Cash Receipts and Disbursements Schedule.
The LTV Corporation
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
On December 7, 2001, the Court entered an order (the APP Order) authorizing LTV Steel Company,
Inc. and its affiliated debtors (collectively, the Debtors) to implement an asset protection plan
(the APP) for the safe and orderly cessation and winddown of their integrated steel business over
a nine-month period (the APP Period). On August 30, 2002 the Court entered an order that, among
other things, extended the duration of the APP from September 13, 2002 to December 13, 2002.
Pursuant to the APP Order, the Debtors hot-idled their primary integrated steel facilities in
December 2001 and ceased producing steel. After entry of the APP Order, the Debtors integrated
steel business continued to ship product that remained in inventory, collected receivables and
marketed the integrated steel assets for sale under Court-approved sale procedures. By order dated
February 28, 2002, the Court approved the sale of substantially all of the Debtors integrated
steel assets to WLR Acquisition Corp. n/k/a International Steel Group, Inc. (ISG) for a purchase
price of approximately $80 million
(of which approximately $11 million was allocated to the purchase of the assets of certain
non-debtor railroads), plus the assumption of certain environmental and other obligations. ISG
also purchased inventories which were located at the integrated steel facilities for approximately
$52 million. The sale of the Debtors integrated steel assets to ISG closed in April 2002, and a
second closing related to the purchase of the inventory occurred in May 2002.
Under the APP, the Debtors paid expenditures in accordance with a budget negotiated with their
postpetition secured lenders (collectively, the DIP Lenders) for the
consensual use of cash collateral to complete the orderly wind down of the integrated steel
business, which budget was approved by the Court on December 18, 2001 and subsequently amended from
time to time (the APP Budget). Pursuant to the APP Budget, the Debtors were also required to
fund certain expenditures for professional fees and expenses.
On December 31, 2002, substantially all of the assets of the Pipe and Conduit Business, consisting
of LTV Tubular Company, a division of LTV Steel Company, Inc., and Georgia Tubing Corporation, were
sold to Maverick Tube Corporation for cash of approximately $120 million plus the assumption of
certain environmental and other obligations. On October 16, 2002, the Debtors announced that they
intended to reorganize the Copperweld Business as a stand-alone business. LTV no longer exercised
any control over the business or affairs of the Copperweld Business. A separate plan of
reorganization was developed for the Copperweld Business. On August 5, 2003, the Copperweld
Business filed a Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code for the Joint
Plan of Reorganization of Copperweld Corporation and Certain of its Debtor Affiliates. On October
8, 2003, the Court approved the Second Amended Disclosure Statement. On November 17, 2003, the
Court confirmed the Second Amended Joint Plan, as modified, and on December 17, 2003 the Effective
Date occurred and the common stock was cancelled. Because The LTV Corporation (LTV) received no
distributions under the Second Amended Plan, LTVs equity in the Copperweld Business is worthless
and has been cancelled.
In November 2002, the Debtors paid the DIP Lenders the remaining balance due for outstanding loans
and in December 2002, the remaining letters of credit were cancelled or cash collateralized.
Consequently, the Debtors have no remaining obligation to the DIP Lenders. Pursuant to an order of
the Court entered on February 11, 2003, LTV Steel has continued the orderly liquidation and wind
down of its businesses.
On October 8, 2003, the Court entered an Order substantively consolidating the Chapter 11 estates
of LTV Steel and Georgia Tubing Corporation for all purposes.
2
The LTV Corporation
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
In November and December 2003, approximately $91.9 million was distributed by LTV Steel to other
Debtors pursuant to the Intercompany Settlement Agreement that was approved by the Court on
November 17, 2003. Because the amount of secured and unsecured debt of such other Debtors exceeds
the amount of the distributions to such other Debtors, LTV s equity in such Debtors is worthless.
On December 23, 2003, the Court entered an Order authorizing LTV Steel and Georgia Tubing to make
distributions to their administrative creditors and, after the final distribution, to dismiss their
Chapter 11 cases and dissolve. In January 2004 an initial funding of $65 million was made to a
distribution disbursing account; distributions to administrative creditors were made from this
account in January 2004 and in June 2004. In September 2005 funding of $17.4 million was made to
the distribution disbursing account and distributions were made to administrative creditors. In
June 2006 an additional funding of $9.0 million was made to the distribution disbursing account and
distributions made to administrative creditors. At this time, LTV Steel and Georgia Tubing are
unable to definitively estimate the amount of cash that will be available for distribution to
administrative creditors, but they will not be able to pay all of their administrative claims in
full and will not be able to provide any recovery to the unsecured creditors of LTV Steel and
Georgia Tubing. Additionally, the value obtained from the liquidation of the Debtors remaining
assets will not be sufficient to provide any recovery for common shareholders of LTV.
On March 31, 2005, the Court entered an order that among other things: (a) approved a distribution
and dismissal plan for LTV and certain other debtors; (b) authorized LTV and LTV Steel to take any
and all actions that are necessary or appropriate to implement the distribution and dismissal plan;
(c) established March 31, 2005 as the record date for identifying shareholders of LTV that are
entitled to any and all shareholder rights with respect to the distribution and dismissal plan and
the eventual dissolution of LTV (although shareholders of LTV will not receive a distribution on
account of their shares of LTVs stock) ; and (d) authorized LTV to establish and fund a reserve
account for the conduct of post-dismissal activities and the payment of post-dismissal claims.
As previously disclosed, LTV is in the process of liquidating, and its stock is worthless. There
is no set of facts known to LTV that will result in proceeds of asset sales exceeding LTVs known
liabilities. Thus, there will be no recovery to LTVs stockholders. Pursuant to the March 31,
2005 Order, the record date for shareholders has been established as of March 31, 2005.
Accordingly, effective as of March 31, 2005, LTV will no longer engage the transfer agent to
maintain the transfer records for LTVs common or preferred stock.
On April 15, 2005, the Official Committee of Administrative Claimants (ACC) filed a motion with
the Court for an order authorizing the Committee to commence and prosecute causes of action against
certain officers and directors of LTV Steel and LTV on behalf of the LTV Steel bankruptcy estate.
A hearing on the motion was held in Bankruptcy Court on
June 7, 2005. A written ruling was issued on September 2, 2005 whereby the ACCs motion was
granted, in part, as determined in the Courts Order. On September 13, 2005, the ACC filed a
complaint in the United States District Court for the Northern District of Ohio (the District
Court) against certain officers and directors of LTV Steel and LTV on behalf of the LTV Steel
bankruptcy estate (the Complaint). On September 20, 2005, the Court granted a motion filed by
Mr. Moran, a former director and officer, for a stay pending appeal (the Stay Order). On January
30, 2006, the Court entered an Agreed Order whereby, under a stipulation dated as of November 30,
2005 between the ACC and the nine named defendants of the Complaint (collectively, the
Defendants), the Stay Order shall apply equally to the ACC and all Defendants and shall stay the
lawsuit until the disposition of Mr. Morans appeal (the Moran Appeal). Also, the parties have
the right to engage in limited discovery as permitted under terms of the stipulation. On April 2,
2009, the ACC filed its First Amended Complaint and the ACC also filed a Notice of Lifting of The
Stipulated Stay of Proceedings.
3
The LTV Corporation
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
Notes to Integrated Steel Business Cash Receipts and Disbursements Schedule October 2009
On November 8, 2006, the District Court entered an order dismissing the Moran Appeal (the
Dismissal Order). On November 28, 2006, Mr. Moran filed a notice of appeal of the Dismissal
Order to the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit heard oral
arguments on January 15, 2009 and issued its opinion on March 23, 2009. The opinion of the Sixth
Circuit affirmed the November 8, 2006 District Courts ruling. On April 6, 2009, Mr. Moran filed a
Petition for Rehearing and Suggestion for Rehearing En Banc (Petition for Rehearing) and Mr.
Moran also filed a Notice of Continuation of Stay Pending Consideration by the Sixth Circuit of the
Petition for Rehearing. On July 15, 2009, the District Court issued an order lifting the Stay Order
previously imposed. On July 21, 2009, the Sixth Circuit issued an order denying the Petition for
Rehearing.
On September 18, 2009, the Defendants filed Motions to Dismiss. The ACC response to the Motions to
Dismiss are due on or before November 25, 2009 and the Defendants replies to the ACCs response
are due on or before February 5, 2010. Oral arguments will be scheduled at a mutually agreeable
date to be determined by the Court.
On March 28, 2007 the ACC filed a motion with the Court requesting an order to approve the
appointment of a Chapter 11 trustee (the Chapter 11 Trustee Motion). On April 11, 2007, April
12, 2007 and May 1, 2007 certain of the Defendants filed motions to convert the case to Chapter 7
(the Chapter 7 Trustee Motion). On June 28, 2007, the
ACC filed a motion to withdraw the Chapter 11 Trustee Motion; the Court granted the ACCs
withdrawal motion on August 1, 2007. An evidentiary hearing on the Chapter 7 Trustee Motion was
held in August 2007. The Court has not yet issued its order.
4
The LTV Corporation
Integrated Steel Business Debtors Cash Account Balances October 2009
Integrated Steel Business Debtors Cash Account Balances October 2009
JP Morgan Chase |
$ | 10,291 | ||
Outstanding Checks |
(13 | ) | ||
Total |
$ | 10,278 | ||